I think it’s a great time to invest in high-quality ASX dividend shares. Here are two that offer income investors a lot of pleasing factors.
Brickworks Ltd (ASX: BKW)
I’d say Brickworks is one of the most underrated ASX dividend shares around. It has a great track record of stability – it has grown its payout every year in the past decade and it hasn’t cut its annual dividend payment for around 50 years.
It has a large building products division. It’s the largest brick manufacturer in Australia, but it also makes pavers, stone and masonry products, roofing, cement and more.
Having the building product segment has helped the business build a significant portfolio of land around Australia’s major cities, which is now very valuable. In partnership with Goodman Group (ASX: GMG) it has been building industrial properties on that land, which is now generating significant annual rental profits for Brickworks and helping fund larger dividend payments.
Brickworks also owns roughly a quarter of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which owns a diversified portfolio of assets across ASX shares, private equity, bonds/credit, property and more. WHSP is paying increasingly large dividends to Brickworks, which is helping Brickworks pay larger dividends to shareholders as well. Additionally, the WHSP shares holding provides Brickworks with asset diversification, helping offset the volatility of building product earnings.
Using the last two dividend payments, this ASX dividend share has a dividend yield of 3.5%, including the bonus of franking credits. The prospect of further RBA interest rate cuts makes this an even more appealing idea.
GQG Partners Inc (ASX: GQG)
GQG is a fast-growing fund manager that’s also providing significant dividend income to investors as it becomes larger.
Fund managers don’t need much capital to grow, allowing it to pay large dividends without hurting growth. Fund managers just need to attract more funds under management (FUM), which can essentially be managed by the same investment team.
GQG’s investment funds’ performance speaks for themselves – they have outperformed their benchmarks over the long-term. Not only is that helpful for attracting new client money, but it means the existing FUM is organically growing at a pleasing pace as well.
One of the reasons why I think the ASX dividend share is an appealing choice for clients is that its annual management fee is low for an active fund manager and it hardly charges any performance fees (despite its strong performance). In my opinion, this makes GQG competitive against low-cost ETFs because of how strong the net returns are.
With how the business is seeing FUM climb over the years, and it’s currently seeing monthly net inflows of more than US$1 billion, the future looks bright for this ASX dividend share.
Using its last four dividend payments, it has a dividend yield of 7.4%.
